OT- the house hunt

  1. You have chosen to ignore posts from ajuly09. Show ajuly09's posts

    OT- the house hunt

    I'd put this posting under real estate but I know I'll get better advice from you ladies!  Simple question, is it better to buy a smaller more expensive house in a nice town or a bigger house in a not so nice town??   We're selling our small condo and moving (hopefully!!) to a house with yard and room for kiddos in the future.  We hope to stay in the town we move to for a while i.e. town where the kids go to school, not sure if that is realistic or not.  I know people don't typically stay in their first house for years and years any more!    Any thoughts?? 
     
  2. You have chosen to ignore posts from culhasa. Show culhasa's posts

    Re: OT- the house hunt

    I think it depends on what your preference is for schools systems.  If you want your child to go to public school, I would pick a town with fairly good schools (which usually means a fairly nice town!)  Otherwise, if you buy a big house in a not so nice town you may have to send your kids to private school.  Honestly - look around and see what is out there...you never know what you will find!  You may find a smaller house in a great town that you fall in love with....you never know.  Good luck!
     
  3. You have chosen to ignore posts from pingo. Show pingo's posts

    Re: OT- the house hunt

    July,
    Most people people, who plan to have children look at the school system as their first priority. Culhasa is right - if you live in a large home in a not so nice town, you may be sending your children to private schools. If you are planning to do that anyway - it really does not matter, where you live.
    Second priority is usually access to public transportation. The town we live in has none. It has at times been a real pain in the you know what. We really need to be a two car family.
    Third comes the property taxes. Some towns has just built fancy schools, and who do you think is going to pay for them?
    We started with a very small home in a nice town. Something we could afford. But have since moved to larger homes as our family grew and we got better established. We still live in the same town, and except for the no public transportation - we are pretty happy here.
    Take your time to look around. If you find a house you like, then look into the school system, the tax rate etc.  It took us 5 months to find our first home. Good luck!

     
     
  4. You have chosen to ignore posts from Dreamer-6-19. Show Dreamer-6-19's posts

    Re: OT- the house hunt

    I would recommend getting a smaller house in a nicer town.  As culhasa said, it also depends on whether you would prefer to send your kids to public or private school.  Although you may want to stay in the house for a while, you should also consider re-sale and the reputation of the town.  Some research and a good realtor also helps! 

    FI and I bought a house 6/08 and opted for a smaller house in a good town with a great school system.  No kids yet, but we have been very happy with our decision and plan to stay here for a while. Smile

    On a side note, I liked looking at houses on ziprealty.com.  I wish you the best in your search!   
     
  5. You have chosen to ignore posts from jasmine09. Show jasmine09's posts

    Re: OT- the house hunt

    Think about your time horizon when considering whether it makes sense to buy now, and where you want to buy.  In many cases, if you are planning to move (and sell) within 5 years, it may make more sense to rent rather than buy.  This is not an iron law though, and it obviously depends on the price appreciation (or depreciation) over that time period, as well as the difference between your mortgage and potential rent payment.  There are considerable transaction costs associated with buying and selling a home (closing costs, loan origination fees, moving fees, future sales commission...), and you don't build up very much equity in the first few years.

    The point is, it may be worth considering children and schools if you are planning to have them soon (say, in the next year or two).  If you think it will be 10 years before you have school-age kids, then I wouldn't worry too much about the kid-friendliness of the neighborhood; you can move before they start kindergarten or first grade.  Moreover, neighborhoods and schools can change over 10 years, so time horizon can matter in that sense too.
     
  6. You have chosen to ignore posts from isabellac3017. Show isabellac3017's posts

    Re: OT- the house hunt

     As a real estate agent, I would say a smaller house in a good town.  In real estate, location is everything.  Location, location, location!!
     
  7. You have chosen to ignore posts from ALF72. Show ALF72's posts

    Re: OT- the house hunt

    Bear in mind that if you don't stay in the house for at least 5 years after the purchase, you are going to be losing money in closing costs on both ends.  This is true regardless of whether the housing market rebounds or if your home gains value after the date of purchase. Don't buy anything unless you plan on living in it for at least 5 years.   This is what I was told by my dad's cousin aunt who makes a serious killing as a real estate agent.  I've found it to be true from personal experience as well. 

    I'd pick a town that you want to stay in and that has a good school system, unless you want to send the kids to private school.  GL.
     
  8. You have chosen to ignore posts from wendy98. Show wendy98's posts

    Re: OT- the house hunt

    One thing to consider with a house is even if it is smaller than you would initially like, are the possibilities to remodel or add on.  Obviously you don't have to do that right now but say you love your house and location, if you have the ability at a later date to build up or out that may be a possibility as well.

    When my DH and I bought we considered many things, one was where we wanted to raise our kids, access to major highways (for where we currently work but also if we changed jobs more than likely we would need access to rt 3 and or rt93). 

    We also considered the yard space as well.  There was one house that had a large lot, in technical terms but 75% of it was a steep hill so there was only about 10x12 part of usable space, which was unacceptable to us.  We didn't want to spend money to build a retaining wall and filling in to get a larger usable area. We went with a house with a similar sized lot but was mostly level, and the house needed a bit more updating inside.

    And finally if you consider a town "not so nice" what do you mean by that?  Do you mean you would not feel safe for either yourself or your potential children?  Does it mean that the town doesn't have a lot of stores or choice (like maybe a Market Basket rather than a Trader Joe's?).  Is the town a place you would be embarassed to have as your mailing address or having people visit you at? 

    I would say go for a house you can afford in a town that you like.  As another poster pointed out you may move before the potential kids have to enroll in school.  Good luck it is a tough decision, I know for DH and I there were many variable some tangible (tax base, cost of house, envisioned renovations) as well as intangible (feel of the neighborhood, feel of the house itself) that went into our decision and sometimes the intangible ranked higher in our list of what we wanted in a house, but all were ones we were able to afford.
     
  9. You have chosen to ignore posts from ajuly09. Show ajuly09's posts

    Re: OT- the house hunt

    Wow lots of great advice. We are working with a realtor and have been looking at houses for over a year now. So we know what is out there, just know that what we want may be more than we can afford.  We have been given the advice to buy at the top of what we can afford.  We want more space than we have, just not sure if we can afford to have the space that we want.  My SIL bought a few years ago and have two kids and have already out grown the place, but can't afford to move. We don't want to make that mistake.  We do need to be near public transportation as DH works downtown and can't drive to work.  Arlington is where we will most likely end up, it is just that you don't get a lot of space for your dollar! 
     
  10. You have chosen to ignore posts from trex509. Show trex509's posts

    Re: OT- the house hunt

    This is a very personal decision!  I would think strongly about what are important factors for you.  For instance, commute.  If you need public transit, this will greatly limit your options.  If you are driving, you may think about moving further out, but be careful about committing to long commutes.  I have friends who bought a house thinking they woudln't mind the 1 hr in bumper to bumper traffic each way, but now they hate it.  I think they would have been happier in a smaller house closer to where they work.

    However, at the same time, I'm glad FI and I didn't settle for a smaller house.  We waited (took us a LONG time to find a place) and now we have a bigger home that I know we will be in for at least 10 years.  I would definitely think of it as a long term investment and buy for what you think you will need in the future.  It would stink if you outgrew it in a few years.  My other friends are trying to sell their house now so they can buy a bigger house (just had a 3rd kid!) and are having a tough time.  Housing is long term investment.  Those who bought a few years ago thinking they'd sell in 3 years are hurting now.

    I think you have to balance your needs for size, convenience, and location.  And definitely look in a wide area.  We started with a narrow search thinking we really wanted to live in one town, but we coudln't find a place that suited all our desires.  As soon as we expanded our search area, we found the perfect house!

    Good luck!  House hunting is exciting (but can be discouraging), but keep at it and you will find your perfect home!
     
  11. You have chosen to ignore posts from cosmogirl. Show cosmogirl's posts

    Re: OT- the house hunt

    I think it might be wise to buy in a city/town that you like and don't assume that you'll be moving any time soon.  You never know what the future will bring.

    Also, town/school reputations are often anecodotal, not facts.  For example, I have friends in Maynard which does not have the greatest reputation yet their kids are getting a wonderful education, the schools and parents are very supportive, and their college rate is great.    Daughter accepted to 3 Ivies. 

    I'd choose there over Snooton or Swellesley any day. 
     
  12. You have chosen to ignore posts from trex509. Show trex509's posts

    Re: OT- the house hunt

    Hi Ajuly!  Just saw your reply!  Arlington is a great town with a fantastic school system.  My friend just put an offer on a house there!  We looked there also in our original search, but we both drive (so we didn't need the public transit) and we ended up getting more for our dollar by moving a little further out.

    It is a definite risk to outgrow your home quickly, especially if you plan to have children in the near future.  I will tell you that we did buy at the top of our price range to get the house we wanted. I also feel that the market is still low, so you can get the best bang for your buck in the current economy.  We never woudl have been able to afford our house if it was on the market 3 years ago.  However, you have to be careful because if you do want to have kids, you need to factor in that increase in expenses, like daycare, which is huge.  Just be sure you've gone through the numbers very carefully before you commit to that 30 year mortgage!
     
  13. You have chosen to ignore posts from poppy609. Show poppy609's posts

    Re: OT- the house hunt

    Alf - I've heard that 5 year thing and wondered about it. Why do you lose money if you move before 5 years - do you know?  Is it literally more money in closing costs because of some mortgage clause or something, or is it more a "figurative" loss of profit?  I've had my house (a 2-family) for 2 years, it's been a condo since April, and DH and I are thinking of selling within a year or two. 
     
  14. You have chosen to ignore posts from easydoesit2. Show easydoesit2's posts

    Re: OT- the house hunt

    "as well as intangible (feel of the neighborhood, feel of the house itself) that went into our decision and sometimes the intangible ranked higher in our list of what we wanted in a house, but all were ones we were able to afford." Wendy98

    GREAT point, Wendy!  While it is absolutely necessary to consider the business/financial/culture things, you must remember the little things as well.  Are you a city slicker or a country girl at heart? How far away will your friends and family be?  How busy is traffic by the house?  Will you forevermore have to own 4wheel drive cars because your driveway is steep? Gas vs oil? hot air vs hot water? Electric vs gas cooking? proximity of neighbors? ages of neighbors? access and proximity of banks, houses of worship, food stores, dry cleaners, etc?  Little stuff, but it all adds up!
     
  15. You have chosen to ignore posts from ALF72. Show ALF72's posts

    Re: OT- the house hunt

    Poppy, basically, you aren't going to gain a ton of equity in your property in less than 5 years [unless the housing market goes back to what it was in 2004 before the bubble burst or unless you pay substantially more than is due on the mortgage each month].  Therefore, you paid closing costs on one end [the initial purchase] and then greater closing costs on the other end b/c people generally trade up.  Any profit that you made on the purchase in that less than 5 year period is probably equal to or less than the amount of total closing costs that you paid.  Then there is also the realtor's fee to consider.

    I got really lucky when I sold my place [bought in 2002 just before the market really took off and sold in 2007 just before the market totally tanked].  Even so, I only made a profit of $35k, minus $10k or so after the realtor was paid.  I got really lucky that my place sold b/c the market essentially froze after that point. 
     
  16. You have chosen to ignore posts from ALF72. Show ALF72's posts

    Re: OT- the house hunt

    Cicirose, Newton has always been known as an affluent, and therefore somehow snooty, town.  I went to BC [graduated in 1994] and it's always had that reputation.  I grew up in Marblehead, which has the same reputation.  Of course, there are always blue collar folks who live in those towns, and people who happen to be affluent are also nice people.  I'm pretty sure cosmo was making a joke.  Have you seriously never heard Newton referred to as a snooty town?  Listen to Loren and Wally in the AM and maybe you'll be lucky enough to hear the Tom's Townie Toon re Newton. It's hilarious.  :-)
     
  17. You have chosen to ignore posts from trex509. Show trex509's posts

    Re: OT- the house hunt

    Poppy:  I think the loss if you sell in 5 years is mostly the closing costs (which can be thousands, espeically if you use a real estate agent when you sell and have to pay the commission).  People think, but oh I gained equity by owning it.  Except in the first 5 years you are paying mostly interest, so any gain in equity is usually wiped out by the costs of closing.  Of course, there are other reasons you might choose to sell, so this is just one thing to consider.

    Oops, she beat me to it.
     
  18. You have chosen to ignore posts from ajuly09. Show ajuly09's posts

    Re: OT- the house hunt

    We bought our condo at the height of the market, almost 4 years ago.  You all know what happened after that.  We are hoping to get the money back that we put down, and if we get that we'll be happy.  Anything towards a down payment will help.  Since we're selling before 5 years we won't get the tax credit (uuuuuugh) but the person buying our place will hopefully have the 8K inventive. 
     
  19. You have chosen to ignore posts from trex509. Show trex509's posts

    Re: OT- the house hunt

    Haha, this is funny to me.  I guess I don't really think of snooty as an insult to a town.  I think it just means it is expensive.  I might describe Lexington as snooty, but if I coudl afford it, I would buy there in a heartbeat!  Same for Netwon, Arlington, Weston, etc, etc.  :)
     
  20. You have chosen to ignore posts from poppy609. Show poppy609's posts

    Re: OT- the house hunt

    Thanks Alf and Trex - that makes sense.  I don't know what I'll end up doing, because I'll NEVER have as low a mortgage as I have now (the condos that are selling on my street that are just like mine are selling at more than double what I owe now).  So while we get frustrated at having someone overhead, not having a yard, having to share every decision with the other condo-owner, perhaps we should s*ck it up a bit longer for the low monthly fee. :) 

    One of you brought up a good point, however.  Perhaps I should think about paying more per month now, since we can afford to.

    ajuly - Arlington is great!  Good luck!
     
  21. You have chosen to ignore posts from jasmine09. Show jasmine09's posts

    Re: OT- the house hunt

    Yeah, just to build on the explanation about the 5-year rule of thumb:
    Of course, in a mortgage you pay more back on the house than the nominal value of the house, because you owe the bank interest on the loan.  In the first few years of a mortgage, most of your monthly payments go to paying interest on the loan.  So you build up very little equity in the home, i.e. the bank still owns most of the property, in a sense. 
    1) Suppose you want to sell your home after a very short period of time, or in a period when home prices are flat or falling.  You may owe more on your remaining mortgage than you will make in selling the house.  Your mortgage is "under water" and you have lost money on the investment.
    2) Even if housing values were increasing slightly over the period, you may find that you have not gained very much from the sale of the home a few years later.
    In addition, you will have to pay closing fees when you sell, and you probably paid a loan origination fee when you purchased the home.  Even if you can sell the home for enough money to cover your mortgage, you may not have "earned" any money on the property.  If your mortgage was higher than the rent you would have paid over that period, then you have lost money.  (Of course, you need to consider the marginal tax rate and value of your mortgage tax deduction in comparing your mortgage vs. rent payments.)

    ...unless there is rapid price appreciation (increases) over the few years that you own a home, you are likely to lose money (relative to what you would have paid to rent a similar property), if you own for fewer than 5 years or so.

    ...I hope this clarifies.  For more details, check out some of these calculators:
    http://www.dinkytown.net/java/MortgageRentvsBuy.html
    http://realestate.aol.com/buy-vs-rent-calculator

     
  22. You have chosen to ignore posts from jasmine09. Show jasmine09's posts

    Re: OT- the house hunt

    p.s. the 5-year rule is directed at prospective home buyers.  For an existing home owner, you have decide whether it is worth for you to sell at a particular time, eat your losses and move on.  Of course, hindsight is 20/20 and if you were plannning all along to move within 5 years, you probably shouldn't have bought.  But that doesn't mean that it never makes sense to sell on a shorter time horizon.  Just make sure you know how much money, if any, you will have leftover after covering closing costs and paying back the mortgage, etc.
     
  23. You have chosen to ignore posts from ALF72. Show ALF72's posts

    Re: OT- the house hunt

    Got ya, cicirose.  I cannot tell you how annoying it was to be called "Muffy" in a Thurston Howell, III voice [rich guy from Gilligan's Island; I may be dating myself. lol] every time I told someone I was from Marblehead.  lol. 
     
  24. You have chosen to ignore posts from cosmogirl. Show cosmogirl's posts

    Re: OT- the house hunt

    Yes, I will agree that middle-class Newton does get lumped together with rich Newton a lot.  And, the uber-affluent communities have their own set of problems.

    Some towns have lower MCAS scores because they have a diverse population with lots of ESL students.  I think it adds to the town, not detracts. 

     
  25. You have chosen to ignore posts from poppy609. Show poppy609's posts

    Re: OT- the house hunt

    thanks, Jasmine.  It's funny, when I bought the 2-family with my cousin, I was totally single.  Then, within a month, I met my now DH!  and we're now TTCing, who knows what the results will be from that.  So a lot has changed.  It's a cramped place for 2 adult humans and 2 adult cats.  I *should* (emphasis on should) make at least double what I now owe on my mortgage if I sell, considering what the comparables have sold for over the past 6 months on my street (a lot have sold, and quickly).  So I think I will not worry too much until we actually decide to do it.  But you've all got me thinking I should meet with someone to discuss, since my head does not wrap around these things with ease. :)

    Sorry to hijack, ajuly!!
     
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